Many expected European regulators to approve the deal, with all three carriers in the network being Europe-based, and struggling financially in a market characterized by an over-supply of capacity for years.
US and China approvals were less certain. While the US ultimately did approve, that support was received despite concerns by many shippers that the alliance would give too much power and control to the carriers, despite assurances that the network would operate separately from sales, marketing and pricing activities.

Impact on Shippers

There were also concerns that the existence of the P3 Network would have the effect of pushing other carriers into bigger groupings, further reducing competition and choice on the main trade lanes.

And that is indeed happening, as the rival G6 Alliance (Hapag-Lloyd, NYK Lines, Orient Overseas Container Line. Hyundai Merchant Marine, APL and Mitsui O.S.K. Lines) announced in late 2013 that it was expanding its services to 240 container ships serving 66 ports in Asia, America and Europe. That means individual services by each carrier will decline.

The market then also saw an announcement of a consortium among Asian-based carriers, (Cosco, K Line, Yang Ming and Hanjin) into a new CKYH Alliance, which will add another letter to its name and become the CKYHE alliance, as it announced in March that it was adding Taiwan-based carrier Evergreen to the mix.

Add to that Hapag-Lloyd's planned acquisition of Chili-based CSAV, making it the world's fourth largest carrier, and it's clear the name of the game is to bulk up right now, in the hopes that bigger will indeed be better from a bottom line perspective.

What is the impact of shippers from all this? Hard to say yet, especially as there will be both short-term and longer-term effects.

The industry researchers at Drewry note that "big shippers stand to gain much [from the alliances] from improved service frequency and a more regular supply of vessel capacity in the short term, thereby reducing the risk of shut outs and roll-overs in times of tight supply."

But, it adds, "the risk to shippers of reduced competition is clear to see, although those sharing vessels may well find themselves competing more on price than service differentiation."

A statement made by the niche transatlantic carrier Atlantic Container Line to the US Federal Maritime Commission on the impact of these alliances was as follows: "Should the P3 alliance be approved, every remaining carrier will be forced to join forces in a similar bloc to remain competitive. The single independent carrier will go out of business. American exporters will no longer have a large portfolio of carriers to choose from. Instead, he will have only two or three big consortia to choose from, with service one or two days per week instead of seven days per week as today. The smaller terminal operators, smaller truckers, smaller logistics vendors and smaller ports will quickly disappear."

Regardless, it seems clear these approvals will be received and P3 and the other alliance networks will move forward.

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